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Calgary, Alberta T2G 1Z1 Canada 2014-05-28 2014-03-31 Basic earnings (loss) per share is calculated by dividing the profit or loss attributable to owners of the Corporation (numerator) by the weighted average number of common shares outstanding (denominator) during the year. Diluted earnings (loss) per share is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential units. All options are considered anti-dilutive when the Corporation is in a loss position. Equity securities are recorded at market value with net unrealized gains or losses reported in income. Realized gains or losses on sale of securities arise when investments are sold, as determined on a specific identification basis. Transactions are recorded at trade date, and the closing price is used for valuation. Revenue from investment income is recognized when earned. The Corporation records return on capital as a reduction to investment income and an equal adjustment to the adjusted cost base of the individual security. On initial recognition, financial assets and financial liabilities are recognized when the Corporation becomes a party to the contractual provisions of the instrument. All financial instruments are classified into one of the following categories: fair value through profit and loss, held to maturity, loans and receivables, available-for-sale financial assets or other financial liabilities. Fair value through profit and loss financial assets are measured at their fair value and changes in fair value are recognized in the consolidated statement of comprehensive income and loss. Changes in fair value that are recognized in the consolidated statement of comprehensive income and loss include interest income and unrealized gains or losses. Held to maturity and loans and receivables are measured at amortized cost which is generally the initially recognized amount. Available for sale assets are reported at fair market value with unrealized gains or losses excluded from the consolidated statement comprehensive income and loss and reported as other comprehensive income or loss, unless any impairment in their value is other than temporary, in which case the loss is charged against earnings. Other financial liabilities are measured at amortized cost using the effective interest method. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial instrument to the net carrying amount of the financial asset or liability upon initial recognition. The Corporation has classified its financial instrument carried at fair values based on the required three - level hierarchy: Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities; Level 2: Valuations based on observable inputs other than quoted active market prices; and, Level 3: Valuations based on significant inputs that are not derived from observable market data, such as discounted cash flows methods. Provisions for taxes are made using the best estimate of the amount expected to be paid based on qualitative assessment of all relative factors. The Corporation reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to the individual CGUs, or otherwise they are allocated to the smallest group of CGUs for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statement of comprehensive income and loss. Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment loss is recognized immediately in the consolidated statement of comprehensive income and loss. The Corporation estimates the useful lives of property and equipment based on the period over which the assets are expected to be available for use. The estimated useful lives of property and equipment are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets. In addition, the estimation of the useful lives of property and equipment are based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in the estimated useful lives of the property and equipment would increase the recorded expenses and decrease the non-current assets. Property and equipment are recorded at cost upon acquisition. Depreciation on property and equipment is provided using methods and rates based on the estimated useful lives of the assets. The assets residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate. Gains or losses arising from derecogniton of an item of property and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the consolidated statement of comprehensive income and loss when the asset is derecognized. An operating segment is a component of the Corporation that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Corporations other components. All operating segments operating results are reviewed regularly by the Corporations President and CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. The Corporation has the following operating segments: a) Food Processing and Distribution Division - The Food Division develops and produces a variety of frozen food products for wholesale distribution within North America. The property and equipment are within the food division and any impairment of property and equipment will be determined within this division. b) Investment Division - The Investment Division manages a portfolio of equity securities, often using margin loans to try to improve performance. Cash is generated via dividends and income trust distributions that are typically paid monthly or quarterly. Additional cash is generated in the form of realized gains when securities are sold. All investments are held within the investment division. Any impairment in a financial instrument will affect the Investment Division. The Corporation measures the cost of share-based payment transactions with employees by reference to the fair value of the equity instruments. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determining and making assumptions about the most appropriate inputs to the valuation model including the expected life, volatility and dividend yield of the share option. Equity securities are recorded at market value with net unrealized gains or losses reported in income. Realized gains or losses on sale of securities arise when investments are sold, as determined on a specific identification basis. Transactions are recorded at trade date, and the closing price is used for valuation. Revenue from investment income is recognized when earned. The Corporation records return on capital as presented as a reduction to investment income and an equal adjustment to the adjusted cost base of the individual security. Canadian Dollars Consolidated condensed interim financial statements Canadian Dollars Management fees charged by an officer of the Corporation included in corporate and administrative expenses: $211,543 (2012-13 - $211,543) Director and Consulting fees paid to current directors of the Corporation included in corporate and administrative expenses: $59,800 (2012-13 - $49,000) Rent paid to a company controlled by an officer of the Corporation: $61,650 (2012-13 - $61,650) The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. In determining these estimates, the Corporation relies on assumptions regarding applicable industry performance and prospects, as well as general business and economic conditions that prevail and are expected to prevail. These assumptions are limited by the availability of reliable comparable data and the uncertainty of predictions concerning future events. The consolidated financial statements incorporate the financial statements of the Corporation and subsidiaries controlled by the Corporation. Control is achieved where the Corporation has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All intercompany balances, transactions, income, expenses, profits and losses are eliminated in full on consolidation. The consolidated financial statements include the accounts of the Corporation and its subsidiaries, which include Naleway Holdco Ltd., Naleway Foods Ltd., Naleway Realty Holdings Ltd., Naleway Foods International Inc., Beaumont Fine Foods Inc., Beaumont Enterprises Inc., Beaumont Realty Corporations Inc., 6434991 Canada Ltd (formerly The Food Source Ltd.), Angiogene Inc., and Beaumont Select Corporations Inc. All of the subsidiaries, with the exception of Angiogene Inc., are wholly owned. As part of the acquisition of Angiogene Inc., the Corporation acquired less than 100% of the equity interests; therefore the interest held by other parties has been recognized as a non-controlling interest in these consolidated financial statements. The functional currency of the Corporation and all subsidiaries is Canadian dollars. Provisions for taxes are made using the best estimate of the amount expected to be paid based on qualitative assessment of all relative factors. The Corporation reviews the adequacy of these provisions at the end of the reporting period. However, it is possible that at some future date an additional liability could result from audits by taxing authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. Liquidity risk is the risk that the Corporation will not have sufficient cash resources to finance obligations as they come due. The Corporations liquidity and operating results may be adversely affected if the Corporations access to the capital markets is hindered, whether as a result of a downturn in stock market conditions generally or related to matters specific to the Corporation, or if the value of the Corporations investments declines, resulting in losses upon disposition. The Corporation generates cash flow primarily from its food division and from proceeds upon the disposition of its investments, in addition to dividends and distributions earned on its investments. The Corporation has sufficient investments which primarily consist of tradable and relatively liquid equity securities to fund its obligations as they become due under normal operating conditions. There have been no changes to the way the Corporation manages liquidity risk since June 30, 2013. The Corporation manages liquidity risk by reviewing the amount of margin available on a daily basis, and managing its cash flow. The Corporation holds investments which can be converted into cash when required. The Corporation uses the last close price in the valuation of its securities. If the bid price were used instead, the value of the portfolio would be $59,909,118, a decrease of $239,085 (June 30, 2013 - $34,319,165, a decrease of $270,918). Non-controlling interest is presented in the consolidated statement of financial position as a component of shareholders equity. The Corporation holds a 94.5% interest in Angiogene Inc., with the remaining 5.5% held by six other investors. Financial statements rounded to the nearest dollar Beaumont Select Corporations Inc. Naleway Holdco Ltd., Naleway Foods Ltd., Naleway Realty Holdings Ltd., Naleway Foods International Inc., Beaumont Fine Foods Inc., Beaumont Enterprises Inc., Beaumont Realty Corporations Inc., The Food Source Ltd., Angiogene Inc., and Beaumont Select Corporations Inc Three and nine months ended March 31, 2014 Canada These interim consolidated financial statements prepared in accordance with International Accounting Standard 34 (Interim Financial Reporting) issued by the International Accounting Standards Board using accounting policies consistent with International Financial Reporting Standards. The same accounting policies and methods of computation were followed in the preparation of these interim consolidated statements as were followed in the preparation of the annual consolidated financial statements as at and for the year ended June 30, 2013. Accordingly, these interim consolidated statements for the three and nine months ended March 31, 2014 and 2013 should be read together with the annual consolidated financial statements as at and for the year ended June 30, 2013. 0.23 0.12 0.95 0.1 0.23 0.12 0.95 0.1 0.23 0.12 0.95 0.1 0.23 0.12 0.95 0.1 0.23 0.11 0.95 0.1 0.23 0.11 0.95 0.1 16166097 16171597 16166097 16171597 23326950 14956908 6730845 1930571 5614272 5489456 5191350 2749894 1277640 2711500 2168991 1271455 2093368 3067360 1935700 1496250 1334500 1047600 768195 587600 516150 560000 440538 163800 372600 233400 219500 169668 158200 145400 141018 98439 136850 148971 114680 110550 105170 104380 102300 142350 86925 85320 79200 71550 68800 50400 66150 53300 54064 50250 53600 44700 43950 37500 37500 35166 32450 33060 32800 26400 25050 24000 19100 137640 10100 5200 7658 3923 2452 2350 559 200 863446 29658 14770 459900 68650 51648 147350 84760 82500 1540 15150 5400 92363 12340 31450 25056 16240 900 112795 1289184 117500 MNP LLP TSX BMN.A Alberta British Columbia, Alberta 06/30/2014 Computershare Trust Company of Canada investor_relations@beaumontselect.com 96032H Philip Gaiser 4 3 0 1101207 91360 320698 37044 90096 4990 -300992 -30936 -22019 -6013 -210896 -30936 -17029 -6013 890311 60424 298679 31031 7646854 88039 483376 16358542 88039 -88039 15372219 43970 88039 -88039 43970 15372219 7734893 0 527346 31730761